Soros to Donate Millions More to Help Russia

By JUDITH MILLER

Published: October 20, 1997

George Soros, the Hungarian-born American financier and philanthropist, said yesterday that he would donate as much as $500 million in the next three years in Russia trying to improve health care, expand educational opportunities and help retrain the military for civilian jobs.

In a telephone interview from Moscow, Mr. Soros said he would announce the initiative in eight fields today. This latest gift would make him the leading philanthropist in Russia, as well as a donor whose presence exceeds that of the United States, which gave Russia $95 million in foreign aid last year.

In the last decade, Mr. Soros, 67, has committed close to $1.5 billion promoting what he calls ''open societies'' -- the expansion of civil liberties, a free press, and political pluralism -- at home and abroad. Since 1994, he has donated more than $350 million a year to his foundations in more than 30 countries, spending more than $259 million in Russia alone. This new gift would make his foundation in Moscow, the Open Society Institute -- Russia, his largest presence in any country, including the United States.

Mr. Soros's latest gift comes less than a month after Ted Turner, the billionaire founder of Cable News Network, announced that he would donate up to $1 billion, or up to $100 million a year for 10 years, to benefit United Nations programs. When he made his gift, Mr. Turner identified Mr. Soros as the philanthropist he most admired, and his role model returned the compliment.

In a telephone interview from Hong Kong at the time, Mr. Soros called Mr. Turner's gift ''wonderful'' and urged other wealthy people to emulate the example.

Mr. Soros said that he had spent the last two weeks touring Russia and that the new program reflected the needs he identified during his trip as well as an evaluation of what his foundation has already accomplished. He said that while his tour was ''rather strenuous and in some ways frustrating,'' he believed that the Russian Government led by President Boris N. Yeltsin both needs and deserves Western confidence and assistance.

''I think this Government will be there for at least three years,'' Mr. Soros said, brushing aside reports that the Government could face a no-confidence vote in the Russian Parliament as early as Wednesday.

While acknowledging that rampant corruption and mismanagement have created a ''precarious situation'' for the Government, he said he doubted that it would collapse any time soon.

''But during the next three years, the Government must deliver if it wants reform to continue,'' he added.

In addition to his philanthropy, his Soros Fund Management, the principal investment adviser to the Quantum Group of Funds, based in Curacao, has invested more than $2.5 billion in Russian business, making him the leading Western investor in that country. Mr. Soros said yesterday that he intended to continue investing in Russia as a sign of confidence in the country's leadership, despite controversy among rival investors stemming from his decision to mix philanthropy and investment there.

Mr. Soros has emotional ties to Russia, where his father was imprisoned during World War I. As a child in Hungary, he said in a speech this month in Moscow, he came to know Russian culture and greatly respected its literary traditions and the determination of its people to survive all kinds of oppression. He began his philanthropy in Russia in 1987, before the collapse of the Soviet Union.

He is an American citizen who escaped the Nazis as a Jewish adolescent in Budapest and emigrated to the United States in 1956, after graduating from the London School of Economics.

Mr. Soros's international investments have come under fire, particularly from Mahathir Mohamad, the Prime Minister of Malaysia. He has repeatedly accused Mr. Soros of mounting politically motivated attacks on his region's currencies, which Mr. Soros has denied.

During the summer, Mr. Soros shut down his foundation in Belarus after Aleksandr Lukashenko, the popular but autocratic Belarusian President, fined a Soros foundation $3 million for alleged tax violations and seized its bank account.

In the United States, Mr. Soros has been harshly criticized for programs that challenge the nation's antidrug laws and other controversial government programs.

But the growing pressure on Mr. Soros's philanthropic empire -- which stretches from South Africa to Haiti, employs more than 1,300 people and has regional offices in New York and Budapest -- appears only to have stiffened his resolve to promote political pluralism and economic reform.

This year alone, he opened five new offices in Central Asia and another in Guatemala and announced plans for nine new foundations in southern Africa, which would expand the number of countries with Soros foundations to 40.

Given his growing personal fortune, which friends estimate at $5 billion although he has not commented on his wealth, he says his efforts are likely to continue at current levels for at least a decade, and perhaps for two.

Mr. Soros said that the details of the new programs for Russia were still being worked out, but that all of the money, which will total a minimum of $300 million and as much as $500 million in the next three years, would be channeled through his Open Society Institute -- Russia. He was forced to restructure the foundation and to replace its leaders last year after discovering that employees were diverting foundation funds into Swiss bank accounts and using them to buy luxury cars.

''The foundation is now operating very efficiently,'' Mr. Soros said.

Donna Shalala, President Clinton's Secretary of Health and Human Services, said she was informed of Mr. Soros's prospective gift several weeks ago. She said the Russian Health Ministry was among the more ''efficient'' Government agencies and predicted that the Yeltsin Government would use the money well. ''It's the right gift at the right time,'' Ms. Shalala said.

Mr. Soros said some of the health care money would be used to set up three to five demonstration sites offering cost-efficient programs to detect and treat tuberculosis, both in prisons and in the general population. Another new project will diagnose and treat drug-resistant bacteria, a leading cause of death in Russian hospitals and what he called ''a major health threat not only in Russia but throughout the world.''

Health problems in Russia rival those of the poorest African countries. Tuberculosis, for instance, is rampant, affecting an estimated 10 percent of the more than one million people in prisons and labor camps. Only one child in five is born healthy, according to official data, which many experts say understate the problem.

Since 1992, the average life expectancy for men has fallen from 62 years to 59 and is still falling -- as it is for women, though more slowly. No country that reports to the World Health Organization has a life expectancy as low. The death rate has risen by 20 percent, an increase without modern precedent, doctors say.

Photos: George Soros, with a newborn at the Moscow Medical Academy this month, believes the Russians need help. (Reuters)